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Currently, the NY and Atlanta Fed are predicting 3Q GDP growth of 2.3% and 2.9%, respectively. At Wednesday’s meeting, the Fed released their latest GDP predictions, which projected 1.8% growth in 2016. This is .2% below their June projections. Read more
Housing dominated this week's news. On Tuesday, the Census reported that housing permits were down .4% M/M and 2.3% Y/Y. The same report showed housing starts decreased 5.8% M/M and rose .9% Y/Y. But the longer trend for both shows a relatively stable state since early 2015: On Thursday, the NAR reported that existing home sales declined .9% M/M but were up .8% M/M. Read more
What’s behind the weak global trade situation? Both the EU and OECD attempted to answer that question this week, with each institution releasing a study on the topic. The EU argued there were several factors, starting with a changing composition of global trade elasticities: Shifts in the global trade elasticity can reflect both changes in individual country elasticities and the change in the relative weights of each country within the global aggregate. Read more
August data included a decline in the index of Leading Indicators, due to the poor ISM manufacturing index and manufacturing work hours. Housing starts increased, but permits and existing home sales decreased. My usual note: I look at the high frequency weekly indicators because while they can be very noisy, they provide a good Now-cast of the economy, and will telegraph the maintenance or change in the economy well before monthly or quarterly data is available. Read more
The dollar was mixed in N.Y. trade on Friday, moving lower versus the euro and pound, while posting gains against the yen and CAD. Aside from the flash Markit manufacturing PMI, which was weaker than expected, though had no lasting impact on the dollar, the calendar was empty. Read more
OVERVIEW The German economy appears to be losing further momentum with the service sector PMI falling to a 16-month low in September. Existing home sales in the U.S. unexpectedly fell 0.9% in August, the second straight month of declining sales. Eurozone business activity is expanding at its weakest rate since the start of August 2015. HIGHLIGHT The German government warned this week that growth will slow down in the second half of this year, blaming the slow growth on weaker foreign demand for goods. Read more
The dollar traded narrowly mixed. USD-JPY clocked a two-session high at 101.24 during the Tokyo session, since falling back to near net unchanged levels around 100.80-90, while EUR-USD plied narrow range around 1.1200. Cable fell by over 0.5% amid a fresh bout of sterling underperformance, taking the pair to a two-session low at 1.2988, while the commodity and emerging currencies settled after gaining against the greenback yesterday, during the post-FOMC risk-on theme in global markets, which lots its fizz today. Read more
The dollar has firmed back some following yesterday's underperformance as the fizz of the post-FOMC risk-on theme abated. EUR-USD has ebbed back to the 1.1200 area after peaking yesterday at an eight-day at 1.1257, and Cable has breached below yesterday's low in making 1.3030. Read more
The dollar started Thursday's N.Y. session on a softer footing, though later managed to perk up some, largely on the back of post-FOMC profit taking. EUR-USD topped at one-week highs of 1.1257, before fading to 1.1209 lows into the close. USD-JPY was supported by the improved risk backdrop, holding over 100.50, before peaking at 100.91. Read more
